Arch Coal to close Dal-Tex by August

Arch Coal Inc. announced plans Monday night to shut down its huge Dal-Tex mountaintop removal mining complex because of a federal court injunction that halted new permits for the mine.

In a prepared statement from its St. Louis offices, Arch Coal said most of the more than 300 miners at the operation would be laid off over the next five months.

"This is one of the most painful decisions I have ever had to make," said Steven F. Leer, president and CEO of Arch Coal.

"We repeatedly pointed out that the delay in granting these permits would lead to very negative results for Dal-Tex employees, their families, the citizens of Logan County and the surrounding area and the mine," Leer said.

"Unfortunately, the court's order leaves us no other option than to commence the shutdown of Dal-Tex."

The company had already laid off 13 preparation plant employees in December because of permit delays. After the permit ruling last week by Chief U.S. District Judge Charles Haden, Hobet laid off another 30 workers over the weekend.

In Monday night's news release, Arch said that about 200 other United Mine Workers members at the surface mine and preparation plant would lose their jobs by mid-July.

In addition, the roughly 50 employees at Dal-Tex's Adkins Fork deep mine will likely lose their jobs in mid-July as well. Adkins Fork provides coal for blending with lower-cost surface mine production and is "simply not economic long-term as a stand-alone operation," the company said.

By early August, the only miners expected to remain at Dal-Tex will be about 50 personnel needed for mine reclamation, Arch Coal said.

"As a practical matter, Dal-Tex should have begun an orderly shutdown several months ago because we had mined out virtually all of the economically recoverable reserves from the existing permitted area," Leer said.

"However, we kept the equipment running, even while we were losing over $1 million per month, knowing that this permit met all of the detailed requirements of the federal and state regulatory agencies, and we had expected a favorable ruling," he said.

The Pigeonroost Branch permit, the largest in West Virginia history, was exempted from a new federal regulatory policy that forces mountaintop removal mines to undergo additional environmental scrutiny.

Federal regulators proposed the new policy to try to settle part of a broad lawsuit by the West Virginia Highlands Conservancy and other environmentalists to try to curb mountaintop removal.

Lawyers for the Conservancy alleged that the Dal-Tex expansion permit violated federal and state water pollution and mining laws in a variety of ways. They asked Haden to halt the permit until it can be rewritten to comply with those laws. They also asked Haden to force regulators to subject it to additional scrutiny mandated by new federal policy.

Haden last week issued a preliminary injunction halting the Pigeonroost Branch permits until he can hold a trial on the merits of the broader mountaintop removal case. The trial is set for early September.

In a detailed, 47-page decision, Haden ruled that the potential permanent destruction of Pigeonroost Hollow by the mining outweighed any "temporary economic harms" that Arch Coal or its employees might suffer.

Lawyers for Arch Coal have appealed Haden's ruling to the 4th U.S. Circuit Court of Appeals in Richmond.

"Arch Coal will aggressively pursue all available legal options to reverse the court's decision and obtain the necessary permits for the development of the Spruce Fork mine," Leer said. "Realistically, however, the time required for this process will mean that the development of Spruce Fork will likely be delayed for several years, and any future decisions concerning the commencement of mining at the site will be influenced by market conditions at that time.

"Furthermore, any coal company - Arch included - will have to think long and hard before investing additional capital in such an uncertain environment."

The Arch news release said the company will also redeploy equipment from the Dal-Tex operation.

One of the large shovels at Dal-Tex, and its associated trucks and support equipment, will likely be shipped to the Black Thunder mine near Gillette, Wyo. Arch Coal bought that mine last year from ARCO Coal Co. A second shovel and associated equipment will be moved to another of Arch's West Virginia mines.

Further, the company said it would evaluate the possibility of moving its Marion 8200 dragline to Wyoming, but added that "a final decision will not be made until an examination of the company's long-term options at Spruce Fork are completed."

"I want our employees, our suppliers and those citizens of West Virginia who supported our efforts to be aware of how grateful we are for their support," Leer said.

"We deeply regret the actions that commenced today," he said. "It is difficult to accept that the plaintiffs and the court can dismiss the personal hardships to be suffered by so many good hardworking West Virginians as ëpurely temporary economic harms.'

"The plaintiffs are unilaterally trying to rewrite the 1977 Surface Mining Control and Reclamation Act and change the manner in which it has been interpreted by federal and state regulatory agencies over the past 22 years," Leer said. "We feel it is truly incredible that a mining process that has been practiced successfully in West Virginia since 1977 without any indication of negative long-term environmental impact has suddenly been deemed unfit for continuation."